UPDATE 3-Boeing 787 delay already in stock price-analysts

Thu Nov 18, 2010 9:44pm GMT

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* Analysts say possible 787 delay priced into shares

* Boeing stock down more than 6 percent since 787 fire

* Shares up 3.4 pct on Thursday (Updates with LAN cargo expansion)

By Kyle Peterson

CHICAGO, Nov 18 (Reuters) - A seventh delay for the long-awaited Boeing Co (BA.N) 787 Dreamliner is all but certain and has already been priced into the company's shares, analysts said on Thursday.

Shares of Boeing, a Dow component, rose 3.4 percent on Thursday, partly erasing losses since an electrical fire last week forced it to halt Dreamliner test flights, but the stock was still down more than 6 percent since the Nov. 9 incident.

"I certainly think there's a very high probability there will be a seventh delay announced in the first delivery," said Kenneth Herbert, an analyst at Wedbush Securities.

"People just really think there has been a lot of negative news priced into the stock," he said.

Herbert said he thinks Boeing, which competes with Airbus EAD.PA for commercial plane orders, may delay first delivery of the light-weight, carbon-composite plane to June or July from the current target of mid-first quarter of 2011.

"Right now nobody has a good idea," Herbert said.

Alex Hamilton, managing director of EarlyBirdCapital, said the sell-off in Boeing shares provides a buying opportunity because so many investors already are braced for a delay.

"A lot of this is priced in," said Alex Hamilton, managing director of EarlyBirdCapital. "There's no certainty as to when flight testing is going to resume. Wall Street hates uncertainty."

Boeing says the fire is being investigated and that it remains unclear whether there will be another delay to the program, which already is nearly three years behind schedule.

"The investigation is ongoing," said Boeing spokeswoman Loretta Gunter. "Until it is complete, we won't have a good understanding of schedule impact."

Speculation is rampant in the aviation industry that another delay is in the cards.

Guesses range from a few months to a few years.

Steven Udvar-Hazy, chief executive of Air Lease Corp, told Bloomberg on Thursday that the first delivery will "definitely" be postponed.

Air Lease has no 787 orders. But International Lease Finance Corp, the airplane leasing company Hazy formerly ran, has orders for 74 787s.

Also on Thursday, Boeing said it took a new order for one 777 from Latin America's LAN Airlines SA LAN.SN in the week that ended Nov. 16.

LAN said the purchase was part of plans to add five Boeing aircraft to its cargo fleet for an expansion of subsidiaries in Brazil and Mexico. The company said it would add three rented Boeing 767 planes by January and incorporate two new 777s in the fourth quarter of 2012.

In a weekly report, Boeing also identified Brazil's GOL Airlines as the buyer in a previous order for 20 737s.

The 777 order is potentially worth $271.8 million at list prices. Boeing has logged a net 484 commercial aircraft orders this year compared with 263 in all of 2009.

Boeing shares rose 3.4 percent to close at $64.61 on the New York Stock Exchange. The stock closed at $69.25 on Nov. 9, before word of the test flight fire. (Reporting by Kyle Peterson in Chicago and Brad Haynes in Santiago)

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